Policies of Microcredit in Brazil : an analysis from the case of Community Development Banks (CDBs)

En attendant de pouvoir publier – prochainement, nous l’espérons – un article en français de Genauto Cravalho de Franca Filho et alii, « L’enjeu de l´usage des monnaies sociales dans les Banques Communautaires de Développement (BCDs) au Brésil : étude de cas de la Banque Palmas » qui donne un aperçu très concret de ce qu’il est possible de faire avec les monnaies complémentaires pour stimuler l’économie solidaire et la lutte contre la pauvreté, on pourra se faire une première idée, avec ce texte en anglais, de l’ampleur de ces expériences brésiliennes, sans équivalent ailleurs dans le monde, semble-t-il. Elles semblent permettre, en effet, de surmonter l’échec des politiques de microcrédit – qui ne touchent pas vraiment les plus pauvres – en allant très au-delà de ce qui se cherche en France avec le SOL, qui n’embraye pas suffisamment sur l’économie. A.C.

Abstract
}}This paper places the current reality of Community Development Banks (CDBs) in the field of solidarity finance in Brazil, featuring the unique nature of their practices in relation to the policy context of microcredit in Brazil. It is explored the scope of such policies in their ability to respond the problem of access to credit in the context of the informal economy. Based on this general diagnosis, the paper assesses the potential and limits of such practices in the construction of a renewed agenda for addressing the issue of microcredit in Brazil.

Introduction

In recent decades, microfinance has been seen as an effective alternative in the fight against poverty in Brazil and worldwide. The offer of credit to the poorest populations (especially those that operate in the informal labor market) is believed to be a possible way not only to poverty reduction, but to the promotion of economic and social development in a broader way. This paper aims to conduct to a critical inquiring on this intent. At first, it will be analyzed the public policy of microcredit in Brazil. The goal is to show the advances and shortcomings of the conventional treatment of microcredit. The critical point concerns the failure of such policies in effectively reaching the lower income population. Secondly, the analysis of CDBs in the case of Brazil is presented as a form of differentiated treatment of microcredit. Finally, this paper discusses the practical possibilities and limitations of CDBs as a new form of treatment as microcredit.

Background : the policy of microcredit in Brazil

Worldwide, microcredit was highlighted from the Global Conference on Microcredit in 1997, which met in Washington about 2,900 people from 137 countries (Microcredit Summit 1997). At this conference, microcredit has emerged as the key tool for fighting poverty in the world (Carvalho et al. 2009 ; Costa 2010). In Brazil, mainly from the 1990s, many ’bets’ have been made through policies and programs to support microcredit, involving a variety of public and private ; national and international institutions. Such policies and programs have emphasized the so-called productive oriented microcredit. This form of microcredit is designed for micro and small enterprises (both formal and informal). They are intended to support small businesses, which are created and maintained by low-income people. In principle, the productive oriented microcredit is not intended to finance consumption (Barone & Sader 2008).

According to Zouain and Barone (2007), it was by the 90´s (mainly due to the stabilization of the Brazilian economy with the Real Plan in 1994) that microfinance institutions have mushroomed in the country, mainly through organized civil society and a number of municipal and state initiatives (state and local funds), known as “bancos do povo” - people’s banks (Zouain & Barone 2007, pp. 375). During the two terms of President Fernando Henrique Cardoso (FHC) and the two terms of President Luíz Inácio Lula da Silva, the Brazilian Federal Government directly assumed the role of formulating and inducing public policies to provide productive credit to low-income populations (Zouain & Barone 2007).

In FHC (1995-2002), « microcredit was understood as a productive credit, able to leverage the income » (Barone & Sader 2009, pp. 1251). Based on this understanding and belief that the credit benefits had a multiplier effect, it was understood that they were able to extend and encourage the maintenance of jobs and income generation. Therefore, the Brazilian policy makers have created in 1996 the Popular Productive Credit Program (PCPP) and the Institutional Development Program (IDP). Both were designed by the National Bank for Economic and Social Development (BNDES) in order to foment and create the basis for the expansion of microfinance in Brazil. Since then, it emerged the need of a legal and institutional framework that would support the government’s actions in this sense (Zouain & Barone 2007).

In the first term of President Luíz Inácio Lula da Silva (2003-2006), despite the continuity, in a sense, of the economic policy of FHC government, the concept of microcredit has expanded as well as their access. The first step of the new government was “bancarizar” (to bank) the lower strata of the population and give them credit not only for production but also for consumption. In this process, public sector banks - Bank of Brazil and Caixa Econômica Federal - through their projects “Banco Popular do Brasil” and “Caixa Aqui”, were mechanisms in the expansion of the government policy of access to microcredit (Barone & Sader 2008). In addition, « public banks operated large network of money transfer agencies, such as bakeries, pharmacies and grocery stores » (Barone & Sader 2008, pp. 1251).

Among the measures taken, it can be highlighted the “pacote de microcrédito” (package of microcredit) created in June 2003. This package consisted of a set of measures aiming to expand the supply of financial services to low-income populations. According to Costa (2010), this package is constituted by three pillars. The first concerned the “bancarização” (banking), i.e. the widespread access to financial services by the population excluded from the financial system by simplifying the process of opening bank accounts. According to the Central Bank of Brazil (BCB), the number of people with access to bank accounts in the country rose from 84 million in 2005 to 118 million in 2011. The second consisted in stimulating the supply of credit through the 2% reserve requirement on demand deposits by the Central Bank intended to microcredit lines (regulated by Law 10735 of September 11, 2003). The third pillar is made from the stimulus to the formation of credit cooperatives. The idea is that such cooperatives are set up in a set of institutions capable of meeting more easily than commercial banks to low-income population. It is worth noticing that what was expected with this more aggressive policy of access to credit in Brazil was the impact not only on the economy of the poorest families directly involved, but also in the national financial system and the macro economy as a whole (Costa 2010 ).

In extension of this government’s purpose, it was created the National Program of Oriented Productive Microcredit (PNMPO), through the enactment of Law 11,110, dated April 25, 2005. In addition to the Federal Law 11,110 of 2005, a set of resolutions and decrees were made to enact the implementation of PNMPO. The Resolution 3422 of 30/11/2006, the National Monetary Council (CMN), regulates the use of funds from the compulsory 2% of the deposits collected by the Central Bank and that was part of the fund to be used by PMNPO. The other source of funds of PNMPO came from the Worker´s Support Fund (FAT ) and its use was regulated by Resolution No. 511 of 18.10.2006. These two resolutions brought the guidelines for implementing the program in relation to maximum interest rate to be charged (up to 4% per month) ; the amount to be funded ($ 10,000.00) ; the form of management and the percentage maximum rate of credit (4% of the value of the transaction).

According to Braga (2011, pp. 68), this program had two basic objectives : « to encourage generation of employment and income among micro entrepreneurs ; and offer available resources for oriented productive microcredit ». The target audience was entrepreneurs with annual sales of up to 120,000 Brazilian reais (around 50,000 euros). For Barone and Sader (2008), this program represented major institutional changes in the microfinance sector in Brazil. Coordinated and executed by the Ministry of Labor and Employment (MTE), the PNMPO started to incorporate, in addition to entities that can only work with microcredit - like the Civil Society Organizations of Public Interest (OSCIPs ) and Credit Societies to Micro entrepreneur (SCMs ) - other organizations authorized to perform financial transactions. By May 2007, Brazil had a total of 231 institutions accredited by the PNMPO (Barone & Sader 2008). Strictly speaking, the PNMPO exerted a more articulated than regulator mission between institutions of oriented productive microcredit, with a purpose more directly related to the promotion of microcredit ; and to structure the microfinance sector of Brazil (Barone & Sader 2008 ; Braga 2011).

In the northeastern region of Brazil, it must highlight the program “CrediAmigo” of Bank of Northeastern Brazil (BNB ). Created in 1997, it became the largest microfinance program in the country and one of the largest in Latin America, both in terms of volume of resources and in terms of number of clients (Zouain & Barone 2007). Only in 2011, CrediAmigo held 1,970,043 operations which meant more than 2.0 billion Euros in form of loans to small scale businesses. Since 2002, over 8 billion Euros were lent by the BNB in this type of credit (BNB 2011). According to Costa (2010, p. 11) one of the main lessons of the program CrediAmigo relates to the need for well-established physical infrastructure, as well as to the network of bank agencies that this institution has in Northeast Brazil.

In August 2011, Brazilian Federal Government conducted a review in the National Program of Oriented Productive Microcredit (PNMPO) and released the “CRESCER” (GROW) - National Microcredit Programme (inserted in actions of “Brazil Without Poverty” Programme) - which aims to provide credit at lower interest rates to low-income individuals and micro entrepreneurs. The GROW is an unprecedented innovation in the context of public intervention in the field of productive microcredit in Brazil. This is because the government is going to change the PNMPO, allowing the public banks (federal and state institutions) the task of giving scale to micro-credit as a strategy for Productive Inclusion (REDE-BCDs 2011). The federal banks will convert their consumer credit portfolios for oriented productive credit, promoting a reduction in the percentage of 87% annual interest rate being charged by the loan. Goals were established to be achieved by banks by 2013, when the program will be evaluated (Brasil 2011). Among the goals, the federal government targets to reach 3.4 million clients served in the portfolio of these banks by the end of 2013. In 2011, the number of clients served is 734,200 (REDE-BCDs 2011 ; SEBRAE 2011). In this sense, the loan portfolio of the public sector banks that participate in the program would come from the current BR$ 654.5 Million to BR$ 2.99 Billion (goal of the program) at the end of 2013 (Brasil 2011). The GROW sets interest rates for microcredit in a maximum of 8% per year and Credit Facility (TAC) of 1% (REDE-BCDs 2011 ; SEBRAE 2011). Resources for the credit are from 2% of demand deposits with banks collected by the Central Bank (currently about BR$ 157 billion).The government will provide BR$ 500 million per year (pay the cost of banks) to ensure the reduction of interest and guidance for the credit (Brasil 2011).

Improvements and shortage of such policies

Even before the enthusiasm for microcredit as a tool to combat poverty, many discussions were being placed in the field of microfinance, dividing the opinion of some researchers. The question that arises is that if, undeniably, microcredit helps in decreasing or eradicating poverty in the world, especially in developing countries (Carvalho et al. 2009). Despite the remarkable strengths and expanding access to credit in Brazil and abroad, for some scholars, these numbers are not sufficient to demonstrate the real impact of microcredit and its penetration in the poorest sections of the population (Carvalho et al. 2009). Scholars such as Nichter et al (2002) are skeptical about the sufficiency of microcredit to generate income and to provide the individual or family needs enough to pull people out of poverty. Carvalho et al. (2009, pp. 07) argue that :

In fact, there is a wide gap between reality and the promise of microfinance. The promise of microcredit is irresistible - lift people out of poverty using their own energy and entrepreneurial potential. However, the impact on reducing poverty through microcredit remains elusive. Some empirical evidence [...] has found a shy penetrating power of the vast majority of these institutions with the poorest segments of the population.

To the same authors, providers of resources and aid agencies (national and international) have requested the microfinance institutions, mostly nonprofits, to have good economic and financial performance indicators. This is because they understand that a good financial performance turns into effective social outcomes in combating poverty. In this scenario, a situation arises for these institutions : how to achieve economic and financial performance by offering credit to a target audience considered of high risk ? For Carvalho et al. (2009), there is a conflict between two main objectives pursued by microcredit organizations. On the one hand the search for sustainability or financial autonomy of these organizations which results in economic and financial order. On the other hand, the search for the achievement of the target audience, namely the poorest population. This would be the social objective and not only of the microcredit organizations, but for public policy relating to it.

The debate sustainability vs. range / focus on the poorest is controversial and at its core ulies the fundamental question, namely whether and how the very poor people can actually benefit from programs of microcredit and microfinance as the concrete in its promise and their goals (Carvalho et al. 2009, pp. 09).

The assurance system in this scenario is important and has experienced changes with the pressures for financial efficiency of resource providers, both public and private ones. In general, the solidarity endorsement is the widespread practice in lending methodologies. This endorsement "means the meeting of three to five people - with small business and credit needs - which trust each other to form a united group, in order to collectively take responsibility for the loans to each of the components group” (Carvalho et al. 2009, pp. 06).

By adopting loan methodologies concerned with the increasingly return on investment and financial sustainability, organizations that are typically characterized as nonprofit organizations are adopting utilitarian logic and parameters typical of private organizations and based on the profit motive. « This logic that arrives to the microfinance sector tends to make it similar to the traditional financial sector, where prevails the market imperatives » (Carvalho et al. 2009, pp. 12).

By looking at the situation of microfinance in Brazil from the perspective of what remains to be done, not only of what has been accomplished, it can be seen the shyness of the results so far achieved by the policies of microcredit in the country. According to Zouain and Barone (2007) the indicators of diffusion of microcredit on the potential clientele applicant ; the effective supply ; and potential demand for microfinance in Brazil, do not offer a very positive evaluation. Braga (2011), analyzing the results of PNMPO shows that the penetration rate of microfinance-oriented production was only 8.55% for an audience of 8.7 million people, specifically self-employed (core of the industry informal), with individual income of the main work up to a minimum wage. Also according to the author, the PNMPO has not reached the poorest workers, and if the analysis has considered other audiences, for example, unemployed individuals in search of employment, the rate of penetration of microcredit would be even lower.

For the current government of President Rousseff, the challenge remains on the issues of employment and combating poverty, which supposedly can be minimized from the micro-credit in Brazil. To Farranha (2005, pp. 140), the very concept of PNMPO (National Program for Productive Microcredit) “does not allow mediation that consents a more direct integration of the program on the poorer strata". It would therefore be at least exaggerated to talk about overcoming extreme poverty from the way they are being treated these microcredit initiatives in Brazil.

The research of Braga (2011) showed that a large segment (those of the poorest of the poor) are still absent from the most recognized microcredit policies, even those of the Bank of Northeast Brazil (BNB), which comprises only 12.4% of potential plaintiffs microcredit in 2009. Among the reasons that attempt to explain these limits of microcredit, an important element relates to the problem of incompatibility of the criteria for granting credit for this population, whose level and exclusion does not allow to fit it (in such criteria).Thus, for these institutions (even public) the cost of serving the poorest becomes very high, requiring appropriate methodologies.

Microcredit, microfinance and solidarity finance : the uniqueness of the Community Development Bank (CDB)

In Brazil, apart from micro-credit driven by market organizations (private banks), government or public institutions (« people’s banks »), or even non-governmental organizations within civil society (Oscips microcredit) and other forms of organizations (credit unions), there is a vast range of experiences of popular organization and/or community (such as Solidarity Revolving Funds, Community Development Banks - time deposits, Collective Investment Groups - GICs) that extend and complicate the understanding of what is the world of microfinance (França Filho & Silva Jr 2009). Such experiences, combined with the segment of the credit union solidarity, constitute the field of the so-called solidarity finance in Brazil.

It is understood solidarity finance as a kind of practice microfinance, composed by initiatives that promote the potential mobilization of local investment ; joint funding of units of consumption and production ; and networks of social relations between individuals as a form that does not guarantee equity and control (Abramovay & Junqueira 2005). The solidarity finance organizations seek to achieve its economic sustainability without putting an adjuvant reach social goal along with their audience and to its territory. It is common for products and services supportive of microfinance credit for production and consumption with guarantees based on relations of proximity ; local credit card ; credit for urban agriculture and/or organic ; solidarity exchange clubs ; social currency ; training of local savings.

Inserted in this notion of solidarity finance, the CDB can be defined as associative nature of the financial system and community aimed at generating employment and income in areas with highly vulnerable populations and socio-economically driven precepts of solidarity economy (REDE-BCDs, 2006 ; Silva Jr 2006 ; Melo Neto & Magalhães 2007 ; França Filho 2007). Unlike the conventional practices of microcredit, which are geared to the individual or individual organization, the CDBs are concerned with the territory to which they belong, be it a community, a neighborhood or a small town. CDBs are simultaneously seeking to invest in production capacity, generation of services and consumption territorial. To this end, it funds and directs the construction of socio-productive projects and the provision of local services, as well as their own local consumption. This is because, in addition to the spread of microcredit of multi-purpose as credit lines defined by each CDB, the main goal and commitment is the building of local networks of solidarity economy through the combination of producers, service providers and local consumers (França Filho & Silva Jr 2009).

In terms of its operation, four basic traits define the existence of the CDB : a) the coordination and management of the Bank’s resources are made by a community organization (in general, each CDB is linked to a local association), b) use of micro-credit lines for the production and local consumption in order to enable fair interests in order to generate income and employment opportunities throughout the community, c) the granting and collection of loans are based on neighborhood relations and solidarity, imposing a control that is much more social than economic, and d) the creation of alternative instruments to stimulate domestic consumption - credit card and local social currency - which are recognized by producers, traders and consumers as effective in boosting the local economy (REDE-BCDs 2006 ).

Although there are some possibilities of institutional arrangement in the formation of a CDB, one of the conditions necessary for its creation regards to the mobilization of endogenous territory. In other words, the top must be given from an intrinsic desire of the community although there is a motivation and processes of excitation by external agents. It is from the desire of the community that begins the process of implementation of the Bank. Anyway, some requirements must be met, such as financial capital for the credit fund ; financial resources for payment of operating expenses of the bank ; community organization (association, board, council, etc.) that can take over the management of the bank ; people trained for the roles of loan officer and credit manager ; and advice for the assimilation of the technology community. That’s how many CDBs have been created through a process of institutional partnerships involving supportive organizations (such as university incubators and specialized NGOs in this field) and funding institutions (municipalities, state governments, government departments, foundations, etc.).

Another aspect to highlight in the functioning of CDBs is the assurance and control based on close relationships and mutual trust. In other words, a CDB considers the formal record of the borrower, only one record to the knowledge of his life in the community. The credit bank agents query the network of neighborhood relations as a source of knowledge. In turn, the recovery of the claim involves the introduction of a mechanism of social control extremely unique : the residents of the territory now have the function of establishing mechanisms of moral pressure from others. According to Abramovay and Junqueira (2005) "these mechanisms lower interest rates and default rates through monitoring ‘the invisible’ in an effective way”. França Filho & Silva Jr Silva (2009) states that the particular aspects of the methodology of credit operations of the CDB occur mainly through “redes de pressumidores” (networks of prosumers). These networks are so named because of associate producers and local consumers through the establishment of channels or specific circuits of terms of trade. To the Brazilian Network for CDBs (REDE-BCDs), this is the way found to strengthen local economies, reorganizing them in the direction of another way of promoting development based on the principles of solidarity economy.

Origins and development of current CDBs

In Brazil, under the sign of the Community Development Bank (CDB), is preliminarily identified the land development project emerged in 1998 from the initiative of the residents of Conjunto Palmeiras, a district of approximately 40,000 inhabitants, situated on the outskirts of Fortaleza (França Filho & Silva Jr, 2006). The CDB of Conjunto Palmeiras, called Banco Palmas. Result of the action of the Association of Residents of Conjunto Palmeiras (ASMOCONP), this experience of this CDB has in its objective the promotion of employment and income generation through the use of various tools for the granting of solidarity finance services to producers and consumers of the territory (Silva Jr 2004).

Because of its innovative practices that « integrates into the same scenario of credit instruments ; production ; marketing and consumption in view to stretch the supply chains, providing the opportunity work, income for the its residents » (Melo Neto & Magalhães 2003), the Banco Palmas came to be recognized. This recognition has become the desire of other institutions that develops social technology. Thus, in 2003, there is the Palmas Institute for Development and Socio-Economic Development, whose function is to implement the methodologies and technologies of social solidarity economy in partnership with several institutions in Brazil and abroad. According to França Filho & Silva Jr (2009), the impact of the activities of Banco Palmas Institute to replicate the methodology of CDB began in late 2004, with the implementation of PAR Bank in the municipality of Paracuru. The following year, the Brazilian government, led by the National Solidarity Economy - Ministry of Labor and Employment (SENAES/MTE), invests in the Project to Support the establishment and consolidation of CDBs, in partnership with the Palmas Institute. This project showed the understanding of SENAES/MTE that the CDB was in a product catalyst for articulating actions of territorial development - simultaneously - production, marketing, financing and civic education.

The project to support the organization of CDB had an important effect on the expansion of CDBs while social technology for economic and social development of territories. In other words, this project served as an amplifier of partnerships and as a catalyst for efforts to make CDBs a policy of encouraging the creation of jobs and income to socially excluded populations. This becomes evident when one finds a series of actions and partnerships between these organizations and agencies of federal, state and municipal governments in Brazil since the end of 2005. The next step taken for the solidification processes of social management of CDBs was the creation of the Brazilian Network of CDBs. The Network aims to contribute to exchange experiences, knowledge and coordination of resources and partnerships for institutional development of all the CDBs in the country (REDE-BCD 2006). More recently, the performance of the network in the years 2010 and 2011 will be largely marked by the execution of the first national project (through public notice of projects under the title : « Action to promote the solidarity finance based on community banks and solidarity funds »the Senaes / MTE), a shaper of the first national political solidarity finance in Brazil. Despite the absence of revolving fund resources for the CDBs, the proposals of the national entity and its regional bodies provide for the creation of 43 other CDBs and consolidation of existing CDBs, by hiring loan officers ; the hiring of technical advice ; training and capacity building of local staff ; purchasing equipment and institutional structuring ; and articulation of their regional networks. The Brazilian Network CDBs know then, in 2011, an important process of expanding the number of experiences, depending on the deployment of the first CDBs under this national policy. Noteworthy in this situation, the creation of the State Secretariat for Solidarity Economy by the city of Rio de Janeiro and the important support provided by this public body of the constitution of the first CDBs in Rio de Janeiro. Given this effort, by the end of 2011 CDBs were already deployed 67 members of the Brazilian Network of CDBs, organized in different cities from north to south.

Conclusion : potentialities and challenges of CDBs

Although significant advances over the expansion of microcredit in Brazil, the revealing of its policies show one basic inadequacy : they are unable to effectively reach those that really need them. That is, the public in the lowest income remains, mostly, unattained by such policies. Thus, such policies have not been successful in his promise to fight poverty. Among the reasons, it is emphasized : the high cost of microcredit operations on high risk represented by the public in lower income due to the very absence of insurance. The high cost of such operations can be explained by the instruments used, which turn out to be inadequate for the treatment of people excluded from formal mechanisms for framing. This lack of appropriate methodology for the treatment of microcredit along with an audience of lower income in turn is indicative of a deeper problem : the limits of the much monetized logic of capital. So far it is possible to effectively treat microcredit through conventional market mechanisms ? The successes achieved by applying a different logic of economic relationship, as evidenced by the practices of solidarity finance, seems to sign toward the limits of the economic paradigm of the market.

Even very drastic solutions in terms of reducing the cost of radical operations for the borrower, as in the program GROW, deserve careful analysis. At least four aspects should be highlighted in an analysis of limitations and challenges of such a program. The first concerns the operation of the culture of productive microcredit banks. That is, the program faces a huge challenge on the inclination of the traditional operators of credit. This is because the practical operation of productive oriented microcredit, there seems not to be, in general, the vocation of the banks (even public), lacking the skills for it. In fact, public banks, organized in the form of agencies, have no practical work in communities (endogenously), nor returning to the small borrowers, nor providing a favorable environment for the local economy and productive inclusion. The big banks are formatted to another public, far from the poorest. The possibility of resources being stranded in the « heavy banking structure », without reaching the final destination, does not seems a remote possibility. Therefore, relying solely on public sector banks the task of through a « stiffer » microcredit operation, promote productive inclusion is at least as risky.

Continuing the reflection on the first challenge, a second challenge relates to the social technology of oriented productive microcredit. This concerns the ability of public banks to reach popular economies. It is felt that the achievement of goals set by the government requires the hiring of large numbers of people, their training and their work in communities with the aim of surveying operations of microcredit borrowers and guidance of credit. From the standpoint of the logic of CDBs, the problem is the concept of « alignment » limited to the figure of loan officer who visits the home or enterprise customer to review their terms of payment and to charge when necessary. To the Brazilian Network of CDBs, the « guided » in microcredit, when it comes to the inclusion of the poor production, involves the dimension of community, neighborhood relations, understand the dynamics of social and economic community, trying to trace local production chains , think of collective strategies of production and marketing, the creation of alternative instruments for collecting and, finally, think the ambience territorial favorable to the success of borrower credit, i.e. an effective inclusion with the support of microcredit. When we know the slums or live with the poor, we know how difficult it is to include production by all sociological aspects that the issue involves. In fact, there is no record of CDBs and knowledge of people who have been rescued from the extreme poverty only by microcredit, even with the help of an agent (or credit consultant). The focus on individual output of a condition of extreme poverty seems to represent a more market ideology than a community reality itself.

The third challenge relates to the criteria for achievement the goals. The goal of borrowers, established by the government (to be reached by public banks) leads us to envisage the scenario of a « battalion of community agents” offering low and facilitated interest credit conditions, which is undeniable to any low income person for the ability to have cash on hand. Thus, it is not difficult to predict that the temptation for the credit will be great and marry to the needs of public banks to achieve goals. This situation, however, can lead to a lack of loans »bad deal", which in the short term further worsens the conditions of poverty, leading to a debt of the poorest. Sometimes, to not get in debt to the bank, the poor fail to pay their basic bills for water, electricity, purchase of medicines, children’s education, etc. .. In this sense, for the Brazilian Network CDBs, the success of a microcredit program should take into account, besides the criterion relating to the volume of credit granted and people reached also another criteria such as : increase in household income generation work ; increased local production and consumption ; strengthening the organization and associative organization of local supply chains ; strengthening of cultural identities ; and strengthening of social bonds.

Finally, the fourth challenge relates to the incorporation of the logic of solidarity economy. That is, there seems to be an appreciable difference in the treatment of microcredit, as the emphasis on the individual or the territory. In the first case, the risk of fragmentation and dispersion is large, and the ability to generate development may not be guaranteed. The second case involves the first. Moreover, the emphasis within the practice itself allows to requalify microcredit, enabling to organize the development from the very community based. According to the logic of solidarity economy, no one overcomes poverty alone and wants to overcome it. The experience of the CDBs have revealed that the success of microcredit in an impoverished area is partly because it helps people finding ways of collective consumption, production and marketing, to create local networks prosumers, where all, simultaneously, are producers, consumers, actors and actresses of social transformation.

The analysis outlined above can conclude that the CDBs are carriers of a different treatment design of the scheme, with high potential contribution to solving the insufficiencies of such policies. However, the effective incorporation of these experiences in a renewed agenda for political treatment of microcredit seems to require a double shift in the paradigm shift : on the one hand, an economic paradigm shift, a vision solely focused on the ability of market logic to a vision that promotes a social economy approach based on solidarity finance. On the other, a political paradigm shift that moves from a vision centered on the management capacity of market players and focused on the ability of a sprawling developmental state to proceed with the management of microcredit for a course of action focusing on institutional partnerships with public organizations and networks of solidarity finance with proven expertise in the treatment of the theme.

If the CDBs should be seen as a recognized potential in the effective treatment of the issue of microcredit on the other hand, a number of challenges that require the practice of strengthening these experiences in Brazil, due to the absence of an enabling institutional environment to welcome their experiences. Beforehand, the CDBs do not have their own regulatory framework. Strictly speaking, from a legal standpoint, they do not exist, which makes the possibilities of effective public policy support. Thus, the support for CDBs is the result of specific projects, brought forward by entities that support and encourage them (Banco Palmas Institute of Socio-Economic Development, other NGOs and university incubators). In most of these cases through a partnership with governments, especially through SENAES / MTE and its project of support for solidarity finance. These actions enable the creation of new banks, but the perpetuation of such experiences remains a major challenge. Added to this fact the effort and difficulty of strengthening the Brazilian Network of CDBs that do not yet have effective support to its structure. This demand is of the utmost urgency of the appeals currently before the creation of countless new CDBs from different corners of Brazil. Thus, the risks of trivializing these initiatives are not small. The question that arises then is : How to multiply the CDB, meeting the demands of local calls, and still perpetuate the structures created without a network structure yet fully established ? This is because the CDBs are faced with a series of demands relating to : certification of new CDBs ; the training and qualifications of all involved ; the development of new social technologies required to improve the dynamic management of microcredit in the territories ; as well as, monitoring and evaluation of actions taken by each CDB.

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// Article publié le 3 mars 2012 Pour citer cet article : Genauto Cravalho de Franca Filho et alii, « Policies of Microcredit in Brazil : an analysis from the case of Community Development Banks (CDBs) », Revue du MAUSS permanente, 3 mars 2012 [en ligne].
http://www.journaldumauss.net/./?Policies-of-Microcredit-in-Brazil
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